The ‘Sandwich’ Generation Is Squeezed

For insurance advisors who wonder why more American families don’t reach out to them or buy insurance, testimony about how difficult it is for members of the “sandwich generation” helps to put the lives of millions of Americans into perspective.

Take Tom Moore, former president of the International Union of Operating Engineers, Local 95, who lives in Ross Township, Pa., a few minutes from downtown Pittsburgh.

Moore and his wife live with four children, three of them with special needs, and a grandson. Ten years ago, Moore’s mother-in-law moved down the street and as she slowly succumbed to Alzheimer’s disease, it was Moore and his wife who became her caregivers.

As if Moore’s own household responsibilities weren’t enough, he and his wife found themselves managing two households. There were two yards to maintain, two homes to clean, extra laundry, extra appointments.

“The extras are never-ending,” he said.

“Medical professionals tell you to call your insurance company to see what help is available,” Moore said. “Insurance tells you to ask your medical professionals. In the end you just keep doing what needs done and hoping not too much falls through the cracks.”

Then there’s Judy Mills of Bethel Park, Pa. She and her husband, Thom Mills, recently became empty nesters when their youngest son, 27-year-old Tim, moved out.

Mills, a director and teacher at St. Valentine Preschool, said she and Thom, a deacon, had postponed by eight years their empty nest stage of life to care for her father who moved in when he was 70.

“As the years went by, family members’ roles began to change quite dramatically, and the parent who helped us now became the one who needed our help,” she said. There were higher food bills, higher cable bills and more expensive utility bills.

Mills’ father recently moved into an assisted living complex, but during the sandwich generation years, her husband was often one step ahead of a corporate takeover, an employer bankruptcy or a corporate merger, “none of which helped us prepare for retirement,” she said.

Her father’s medical and housing requirements “pretty much guarantee that we won’t be seeing any inheritance,” she said. “The dream of carefree retirement, for us, seems very distant.”

And Mills is one of the lucky ones. Millions of other Americans — single parents, for example - often find themselves with the same responsibilities and burdens as the Mills family, but with half the family resources.

For them, the nest — if you can call it that — is never empty.

Moore and Mills recounted their stories at a hearing of the Senate Special Committee on Aging before Sen. Bob Casey, D-Pa. The committee has held hearings to study issues around aging and long-term care.

The heavy financial and mental toll caregiving takes on adults caring for family members older and younger is one of the reasons why financial advisors need to keep insurance and retirement planning concepts simple, said Ameriprise Financial advisor Michelle Young.

With three generations living in the same household, there’s little time for families to tackle long-term goals or for spouses to discuss these issues with each other, Young said in an interview with InsuranceNewsNet.

An Amerprise survey of women and finances conducted in March found that 42 percent of women ages 35 to 54 have seen “a significant decrease in assets” in the last five years as these women have experienced divorce and unemployment, or have come under pressure from financial obligations like funding a college education or caring for parents.

Experts on aging estimate that more than 65 million people have provided care to chronically ill, disabled or elderly family members or friends in the past year. About 20 percent of them - or 12.9 million people - have provided care for both adult and child dependents.

The market value of “free” services provided by family members represents the equivalent of $350 billion annually, said Charles F. Reynolds III, professor of geriatric psychiatry and director of the University of Pittsburgh Medical Center/Pitt Aging Institute.

Caregivers are “burned out and exhausted from juggling work, family responsibilities and caregiving,” Reynolds said.

“Caregiving is a risk factor for mortality,” Reynolds added.

For caregivers who leave the workforce, the impact on earnings, Social Security benefits and private pension savings can add up to hundreds of thousands of dollars, according to a 2011 study MetLife study.

For women, the total individual amount of wages lost from leaving the labor force early to focus on caregiving equals $142,693. The estimated impact of caregiving on lost Social Security benefits is $131,351, adding up to a collective loss of $274,044, the study found.

For men, the collective loss comes to $233,716, the study also found.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].